The Delta independent., 1887-03-01
MADE AS CLEAR AS DAY.
Puts, Calls, spreads, and straddles
Dcscribed-Inside View of the
Ways of a Famous Wall Street

| ~ De L akcu.
There are few Offices near the stock
exchange which are richer in reminis-
cences than those of Russell Sage. at
Rector street and Broadway, says The
New York Mail and Express. The
headquarters of Mr.. L Connor are on
the first floor, looking out on Broad
way, and the rooms of Mr. Sage follow
along the line. of Rector street. The
general office is at the head of the
stairs, and the inner rooms are reached
through this. Here Gen. Grant was a
frequent visitor. When he is in town,
James e. Blaine is pretty sure to call.
Here the meetings of the Pacific Mail
are held. and these always bring to-
gether notable gathering of mil
lionaires. Among them are Sidney
Dillon. with his tall. spare form,
bronzed face, and gray hair, looking
like an old gentleman of more old
fashioned kind than are common nova
days. Here is c. P. Huntington. port
ly and handsome, followed by Henry
Hart, round and gray, climbing up the
stairs with the noisy assistance of his
cane. j. b. Houston, elegantly dress
| ed, with his overcoat carried over his
arm, of medium height, and what the
lad es would call too handsome for any
thing. brings up the rear. The doors
are closed. and the meeting scarcely
begins when Edward Lauterbach, the
diplomatic of the Reading organization.
short, roundly built. with smiling face
and well-kept whiskers, hurries up the
stairs and breathlessly follows on the
members of the corporation for which
he is attorney.
And before and after tho meeting,
and sandwiched in between such dis
tinguished people who have been men
toned, come brokers' clerks and bro
kers' messengers, intent on "puts"
aud "calls" and spreads and .strad-
dies" Mr.. Sage does not deal so heav-
lily in these famous, much-quoted, and
infrequently understood articles, but
still he does great deal in them even
now-much more than S. V. White,
Harvey Kennedy, and others, who. with
less capital and less ability to read the
market, have in these later years fol-
lowed the pioneer into the field. For
Mr.. Sage was the pioneer. He it
was who invented puts" "calls."
spreads" and .straddles." He be-
gan dealing in them when he first came
to Wall street in 1861, after his with
drawal from congress. and he has been
dealing in them ever since; and the
stock markets of the world have taken
up this ingenious speculative device of
Mr.. Sage's. and stock privileges are
just as well known on the continental
bourses to-day and in the London mar
ket as they are here, and they are large
ly dealt in. Perhaps not so largely as
here. because the device is American
and an outcome of American genius,
but Transatlantic spectators could not
fail to see the advantages they offered
and have perforce adopted them. Lon
don declares that the nomenclature, SO
far as spreads and "straddles" are
concerned, is not refined. and calls them
differently, but what they deal in are
American stock privileges just the same.
"And what are puts. calls
spreads and 'straddles?'" asked the
writer when he first went down on Wall
street.
"Well." said John E. Mccain. the
confidential clerk of Russell Sage, of
whom the question was asked: "ril tell
you if you promise never to mention
the poetcal subject again. 1t requires
pretty deft wording to make the thing
clear, SO it is not an exhilarating SUBJ
ject to talk on. You hear o great deal
about puts and calls but venture
to say there are fifty million people in
the United States who do not know
what they are, nor what the meaning
is of the word privileges Now a
privilege Is contract by which the
maker of it, Russell Sage. S. v. White,
Jay Gould. or Harvey Kennedy, en-
cages to purchase from the holder in
the one case or sell to the holder in the
other case number of shares of some
specified stock, at certain price, at
any time within certain period. at the
option of the holder. Got that?"
"a call is privilege bought of the
maker at certain price, and the own
er of it is privileged to call for certain
amount of stock at a given price within
thirty. sixty CT nenty days, four or six
months. If man holds put, he has
the right to deliver to the maker of the
privilege stock at certain agreed
price within certain number of days.
Clear? No. Well. let's try once
more.
Suppose Western Union is selling
at 70. A man wants sixty-day put
on it at 66, because he believes the
stock is going down. He gives Mr..
Sage, Mr.. White. Mr.. Kennedy, or Mr..
Gould per cent on the amount of stock
hSygants to deal in, A hundred shares
Edntdal and ! per cent is 800. He re-
receives in return a slip Of paper signed
|sby either one or the other of these gem
49,